redfin.com, the first online brokerage for residential real estate in the US, is clearly feeling the pinch.
The company has announced on its blog that it has laid off around 20% of their staff. This announcement follows closely on the heals of zillow.com announcing that it was laying off 25% of its staff.
The blog says:
Unlike other startups, our industry’s recession started a year ago, when home prices first plunged.
Hence the layoff.
Since then, we’ve fought like starving animals, and with some success: while industry-wide transaction volumes dropped 33%, we grew revenues by nearly 50%. Traffic grew more than 300%.
Even a month ago, we were raising 2009 revenue projections. All our markets, now including Chicago, contributed profits.
But the past few weeks have seen a major reversal. As the stock market wiped out prospective down-payments, tours and offers dropped 30%. Transactions that were done came undone. October will still be pretty good, then we’re headed for a big dip.
redfin.com CEO, Glenn Kelman, denies that it is the beginning of the end for his website, and remains optimistic that by adapting to market changes it can still succeed: “We offer an alternative to traditional brokers that customers want, and not in some namby-pamby nice-to-have way. Our market, even if it shrinks to half its recent size, would be $30 billion per year.”
In contrast, and no doubt to pre-empt any speculation following redfin.com’s woes, real estate search engine trulia.com has published its own blog entry stating that no layoffs would occur. On Monday the company announced that while it would be cutting costs and “refocusing the team on our core products to fit today’s marketplace”, its staff will not be affected:
We are not:
- Laying off staff
- Changing our core strategy
- Compromising our user or advertiser experience
Even if trulia.com remains optimistically afloat, and redfin.com succeeds in adapting, these announcements, combined with last week’s layoffs from zillow.com, (read our opinion piece here) indicate tough times may be here to stay for the US.
Advertising Partner
-->
{ 2 trackbacks }